International Systems Architecture: Strategies and Challenges

International Systems Architecture

Global Strategies and Environment

Understanding the global environment involves analyzing the business drivers pushing your industry toward global competition and the inhibitors creating management challenges. Developing a corporate strategy for global competition requires determining how the firm should respond to such competition and developing an organizational structure and division of labor. Key decisions include where production, marketing, and sales will be located.

Developing an International IS Architecture

The major dimensions for developing an international information systems architecture include:

• Global environment
• Corporate global strategies
• Organizational structure
• Management and business processes
• Technology platform

Challenges and Obstacles

Several challenges and obstacles can hinder global business systems:

• Cultural Particularism: Regionalism, nationalism, and language differences.
• Social Expectations: Brand-name expectations and work hours.
• Political Laws: Transborder data flow, transborder data and privacy laws, and commercial regulations.
• Standards: Different EDI, email, and telecommunication standards.
• Reliability: Phone networks are not uniformly reliable.
• Speed: Different data transfer speeds, many slower than in the U.S.
• Personnel: Shortages of skilled consultants.

Organizational Structures

Three main kinds of organizational structures exist:

• Centralized: Management and control reside in the home country.
• Decentralized/Dispersed: Authority and responsibility are delegated to local foreign units.
• Coordinated: All units participate as equals in a collaborative approach.

Global Strategies

Four main global strategies are commonly employed:

• Domestic Exporter: Focuses primarily on domestic operations with some exporting activities.
• Multinational: Operates in multiple countries with significant adaptations to local markets (e.g., Japanese automobile manufacturers).
• Franchiser: Grants licenses to operate under its brand and business model (e.g., Starbucks).
• Transnational: Operates across national borders with integrated and coordinated operations (e.g., DaimlerChrysler).

Systems Configurations

Four main types of systems configurations support global operations:

• Centralized: Systems development and operation occur entirely at the domestic home base.
• Duplicated: Development occurs at the home base, but operations are handed over to autonomous units in foreign locations.
• Decentralized: Each foreign unit designs its own solutions and systems.
• Networked: Development and operations occur in a coordinated fashion across all units.

Benefits of Global Information Systems (GIS)

• Effective communication at a reasonable cost.
• Effective collaboration with groupware software, Group DSS, extranets, and teleconferencing devices.
• Organizations can access each other’s databases and collaborate on projects even when geographically dispersed.

Electronic Data Interchange (EDI)

EDI is the electronic exchange of data using interorganizational information systems. It involves a set of hardware, software, and standards that facilitate the EDI process.

Benefits of EDI

• Cost savings
• Increased speed
• Improved accuracy
• Enhanced security
• System integration
• Just-in-time support

Global Software Teams

Key factors influencing global software teams include catalyst factors, sustaining factors, size factors, and vision factors.

Users of Global Systems

• Multinational Companies: Companies that operate in several countries.
• International Companies: Companies that do business with other companies in different countries.
• Virtual Global Corporations: Joint ventures whose partners are from different countries.

Types of E-commerce

• Business-to-consumer (B2C): A person buys a book from Amazon.com.
• Business-to-business (B2B): A retailer like Walmart orders from distributors.
• Business-to-employee (B2E): An employee uses the web to change employee benefits.
• Consumer-to-consumer (C2C): One person purchases from another on eBay.

Capabilities of the Web

• Global Information Dissemination: Ability to market products over vast distances.
• Integration: Websites can be linked to corporate databases to provide real-time access to personalized information.
• Mass Customization: Firms can tailor their products to meet customer needs.
• Interactive Communication: Companies can communicate directly with customers.
• Collaboration: Different departments of a company can use the web to collaborate.
• Transactional Support: Clients can conduct business online.

Extranets

Extranets are a newer, more affordable alternative to EDI.

Advantages of Extranets

• Improved timeliness and accuracy of information
• Central management of documents
• Cross-platform nature
• Low cost of adoption
• No specific user training required

M-Commerce

M-commerce involves electronic transactions using wireless mobile devices.

• Mobile Networks: Wireless switched public networks.
• Smartphones: Enable high-speed data transfer and “always-on” connectivity.

IS Infrastructure

IS infrastructure includes hardware, software, networks, data, facilities, human resources, and services.

Threats to IS Facilities

Key issues include where to house data centers and protecting them from threats such as floods, hurricanes, terrorism, power outages, and seismic activity.